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Remember that this is no more a bailout of Greece and Spain and Portugal than TARP was a bailout of subprime borrowers. The indebted countries are still looking at low growth, painful budget cuts, aching recession, high-borrowing costs, and an inflexible currency that will stop them from increasing their exports. Remember what Desmond Lachman said.
Rather, this is a bailout of the European banking system (and possibly some international banks), much like TARP was a bailout of our banking systems (and some international banks). The way people understand the European crisis is that a few countries hold much too much debt. But you can flip that around, too: Many banks loaned a few countries much too much money. And if those banks don't get paid back, they're going to go insolvent, and the banking system is going to freeze.
Intra-European resentment is probably going to protect the banks from becoming the villains here (Germans would prefer to blame the Greeks than Deutsche Bank), but they're a big part of the story. Note the New York Times' report on the market's reaction the bailout: "European banks were the early winners. In France, BNP Paribas soared 14 percent and Credit Agricole rose 16 percent; Germany’s largest bank, Deutsche Bank, gained 10 percent."
ECB is also going to buy private and public bonds (something that was once off the table). Central banks of US, Japan, Canada (and some others) are doing USD/currency swap trades. Sounds like we're going to print dollars to swap for euros, so ECB can buy bonds from broke banks and governments, using the bad bonds as collateral to swap the currency? :confused: 
